This is the Preview of the book Titled Inactivity Based Cost Management: Published as an eBook through Smashwords and Amazon Kindle as well as Printed version from Createspace of Amazon.com. Smashwords provides you to view the book 20% from page 1. It has all different formats of your choice such as Sony reader, Amazon Kindle, ePub, palm mobile, PDF, RTF. Whereas Amazon Kindle provides its own proprietary format kindle. Both has the same ISBN 978-81-920004-0-4 number. This Preview contains the overall synopsis of the book. You can go through this Preview, go to the site given hereunder, read the first 20% of the Book and choose to purchase the book.
Further blogs on the subject under Preview will get added up topic by topic. CSR - Corporate Social Responsibility will be for discussion that I shall post during this week. Also under the topic of Ethics and Politics there would be a blog under study. You will notice that this Book is for Measurement of intangible that difficult topics mentioned will be measured. It means IBCM is capable of measuring CSR between one Corporate and the other.
You may pass on this info to your circle of friends and associates too. You are welcome to come back to me at any time.
Book is available from:
Smashwords
Amazon UK as well Amazon US.
What does it offer: A synopsis:
I The theme
The theme of the book is: Activity is a cost incidence whereas Inactivity a Cost Consequence.
IBCM is the Measurement of Intangible: Governance, Ethical & Fiscal Responsibility and Accountability.
It is imperative to measure Cost Consequence.
II Cost Consequence
Balance Sheet measures the Cost Incidence whereas Cost Consequence is left in a limbo. Cost Consequence is the very essence of Governance and IBCM provides the platform to box the Accountability so that Cost Consequence could be evaluated.
III The Sections of the Book
There are three sections in the book and a total of 18 Chapters: Approx. 270 pages by PDF and by Amazon Kindle approx. 4 mb, with about 40 Charts and Illustrations.
a. The Root,
b. The Stem and
c. The Knowledge Tree.
Section 1: The Root
Chapter 1 Introduction
Chapter 2 Intangible
Chapter 3 Intangible Assets
Chapter 4 Fighting Corruption
Chapter 5 Intangible Defined
Chapter 6 Measuring the Intangible
The Root expounds the basic structural difference of the past and buttonholes on the core that brings into focus 'to-day'. The meaning and purport of the theme of the book - Activity is a cost incidence whereas inactivity a cost consequence, is elucidated. You will notice that cost consequence is relevant for only one day, i.e. to-day and as a corollary Governance is feasible for only one day, i.e. to-day, neither by the dateless past nor of the infinite future.
It derives the measuring device, simple but robust that could be understood by a farmer, to look at the substance as a whole.
IV Measuring Device
The measuring device is derived from the definition of Intangible that is central to every substance in the universe. Locating and buttonholing on it is an interesting exercise that the reader would surely be with. The statement from the book “In the domain of intangible there is no duality, no paradox, no plurality, and no opposite values that are the characteristics of the tangible domain.” should relieve the readers fresh bout of jargon as well facilitating a single ranking that can be yoked with the performance of any other substance for comparison.
When antimatter collides with matter the mass is converted into pure energy and so does the intangible when it collides with the substance. That's Governance, a dynamic force of pure energy. Substance creation and task accomplishment provide a basis of measurement, keeping its independence even while performing tasks yoked with another, enabling accomplishment of infinite succession of finite purposes by controlling each goal.
V Analysis
Analysis of Government Auditing Standards issued by US Government Accountability Office, Accounting Standards from IASB - IAS 9 Capitalisation of Development Costs and IAS 38 Intangible Assets leading to Financial Crisis of 2009, Foreign Corrupt Practices Act [FCPA], OECD Anti-bribery Convention and its Consultation Paper Review backed up by the definition of Intangible prepare the reader to collide with the case study of UN Convention Against Corruption [UNCAC] Preventive Measures, resulting in Governance of paradox - by IBCM.
Is it not a paradox, but true, Madoffs and Mahatma Gandhis exist in the same plane? IBCM resolves the paradox.
VI Section 2 The Stem
Chapter 7 Governance of Responsibility
Chapter 8 Governance of Accountability
Chapter 9 Inactivity Based Cost Management [IBCM]
Chapter 10 IBCM - UNCAC: Article 13 - Participation of Society
Chapter 11 IBCM - UNCAC: Article 5 - Preventive Anti-Corruption Policies and Practices
Chapter 12 IBCM - UNCAC: Article 10: Public Reporting
Chapter 13 IBCM - UNCAC: Article 6 - Preventive Anti-Corruption Body or Bodies
Chapter 14 IBCM - UNCAC: Article 8 - Codes of Conduct for Public Officials
Chapter 15 IBCM - UNCAC: Article 9 - Public Procurement and Management of Public Finances
Chapter 16 IBCM - UNCAC: Chapter II Preventive Measures - Statement of Accountability
The Root not only derives a measuring device but brings out the attempts since 1977 to stem the rot in the society that the second section entirely focuses on Corruption. UNCAC is a wonderfully prepared document but the surprising aspect is that more than 100 countries are signatories to the UNCAC. The grouping of resource owners by Ethical and Fiscal Responsibility and deriving the Accountability could give the signatories a real meaning of RTI. Persons who run the Governments will know from the book where they stand.
IBCM applies its principle of measurement, as a case study, to the Preventive Measures, Chapter II of UNCAC. The study of Cost Consequence is the only tool to gauge Preventive Measures. Ranking for each Article covered, deriving the Index of Inactivity by each resource area as well by Performance Criteria nails the Accountability factor individually and collectively.
VII Section 3: The Knowledge Tree
Chapter 17 Ethical Responsibility
Purpose: Knowledge Is the Goal of Ethics
If H.G. Wells could comment: "Amidst the tens of thousands of names of monarchs that crowd the columns of history ... the name of Asoka shines, and shines almost alone, a star.", then what could be the ethical responsibility that was followed to get the encomium from the distinguished historian of repute that extols Asoka's regime, around 300 B.C., as the pioneer of a Humane Society? What did Asoka stand for?
The above is an extract from the book, of Section 3 Knowledge Tree.
Asoka had practiced 2300 years back the following tenets of Humane Society, that the book brings out for the purpose of measurement of good governance a template to monitor the progress:
1. State morality, and private or individual morality
2. Policy of peaceful co-existence
3. Reformation of Judicial System
4. State resources were used for useful public works
5. Asoka made himself more accessible
6. Welfare of its people
7. Human rights - compassion, moderation, tolerance and respect for all life
8. Animal rights
9. Protection of all religions
10.Generosity to the poor
11.Well-learned in the good doctrines of other people's religions
The Readers would find the statement derived in the book: “ that Secret Knowledge is the goal of Ethics.” invigorating.
Chapter 18 Business Ethics
Purpose: Proposed International Ethical Standards Board shall certify Corporate, Senior Executives and the Board of Directors.
Free enterprise is an expression of freedom, whereas Ethical Responsibility is an expression of liberty, that threshold values emanate to bridge Ethical and Fiscal Responsibility.
The purpose of the book is to initiate the procedural aspects of establishing IESB - International Ethical Standards Board, in the same line as IASB, covering every public servant entrusted with fiscal responsibility.
VIII Budgeting for Cost Consequence
Governance is Real-Time Monitoring.
Budgeting for Cost Consequence means preparing at start a completed substance with
Quality ready for Action. A solution to Obama's speech: “We've all seen how quickly good intentions can turn into broken promises and wasteful spending. And with a plan of this scale comes enormous responsibility to get it right.”
A substance is a matter sentient or insentient awaiting Action, meaning it acquires a Quality e.g. UNCAC document is a substance that can readily be put into action clearly defining responsibility, but insentient. A baby born is a sentient substance that has acquired a quality and ready for action. Readers shall note the case study referenced in the book on Public Procurement and Management of Public Finances of a contract worth about $191 million and will conclude the Financial Crisis 2009 is the result of Action plan on a substance that was never created, just as G20 declaration of good intentions, economic rescue packages and Invasion of Iraq, ending with the statement - Iraq free to chart its own course. For Governance, Substance is the basis as in a Chemical Laboratory, not good intentions or economic theories.
IX Index of Inactivity
Index of Inactivity is the outcome of Governance report that forms the basis of Accountability, where Cost Consequence as on today can be evaluated.
Both Ethical as well Fiscal Responsibility owners are accountable for what they have performed or remained insentient.
It is linked to the performance of the process areas. For the task accomplishment of the process area Index of Inactivity provides the extent to which further action is needed as on date.
The example in the left is the outcome of the analysis of Article 9: of UNCAC Public procurement and Management of Public Finances.
X Holistic view of Index of Inactivity
An illustration of Governance of Process Areas by IBCM, as on date.
XI Budgeting for Cost Consequence - who can prepare and use it?
The book provides sufficient understanding for preparation of a Budget of Cost Consequence which is the creation of substance with Quality, a prerequisite before Action. Signatories to UNCAC can use the template to go ahead straight away for Action.
Government from Afghanistan to Zimbabwe, Corporate without exception assuming as they are BP themselves and even NGOs, such as Bill Gates, Bill Clinton, Kofi Annan Foundations shall prepare a Budget of Cost consequence and declare to the public in advance as to how and what they intend to govern.
Several organisations like Rating agencies, S&P & TI should persuade the Governments to prepare a Budget of Cost Consequence and monitor the Governance rankings that shall form the basis of their Sovereign Ratings.
Funding agencies such as World bank, Private Equity Participants to insist on Budget for Cost Consequence and Governance follow-up, as provided under Chapter 15 IBCM - UNCAC: Article 9 - Public Procurement and Management of Public Finances.
Universities and Research Scholars will find the concept of measuring intangible unique, like treating zero when found as a number on its own right and useful for several applications based on the theory of IBCM, following the dictum set by Galileo Galilei: “ Measure what is measurable, and make measurable what is not so.”
World over there is great resentment towards the Governments. Governments must take the priority of ending corruption and introduce Cost Consequence Budgets for getting the public support lest terrorism spreads around the globe. It is not Corporate Governance but Government Governance the need of the hour.
Quote from the book:
Purpose
Fire, debt and enemy, if remain even in small trace, will grow again, so finish them completely.
Corruption is the biggest enemy, not terrorism. Even if war on terrorism is won but corruption remains, terrorism will rise again. If corruption is removed without a trace - terrorism will disappear, as terrorism thrives on duplicity.
The Book provides the appropriate measuring standards of Governance.
XII The National Grid of Governance
Corporate Governance
The tendency among the corporate is to implode all the time being summarily satisfied of being in the list of 20 World's Most Ethical companies in one year and disappear in the next. Each company is a contributor and each is as strong as the weakest link in the National grid. Corporate Governance is a continuum that IBCM provides the findamentals of joining the grid and be seen in isolation as well together.
National Governance
Knowledge is of five categories: 1. Good Knowledge; 2. Wrong Knowledge; 3. Knowledge of Verbal Delusion; 4. Knowledge of Ignorance and 5. Intuitive Knowledge. Corporate work on the fifth all the time. IBCM study proves 'Government for the People' belongs to the third category.
XIII About the Author
He is the son of the renowned educationist late Rajah Iyer, Headmaster policy maker and Member of the Legislative Council of Tamil Nadu till his death in 1974. Jayaraman’s Rajah Iyer Trust provides a support system for teachers.
Major contributions to the world of Accounting:
In 1966 Jayaraman learned the ropes under visiting IIM-A faculty member late R Subrahmanyam of Hindusthan Lever, submitting cost data to the Govt of India for the fortnightly increase in the selling price of vegetable oil, Dalda. Sub as he was known, used all possible cost allocation and apportionment while Forward Commodity Exchange was prevalent during that time. Not a single cost driver could afford to be missed as the difference in price from one fortnight to the other was so insignificant that it would not be possible to accommodate in today's currency break-up. In due course, the Govt. of India brought in a Cost Audit Dept. including medicine and petrol under Dr. Rajagpalan, the first Management Accountant of ICAI and ICWAI and Jayaraman’s mentor in Management Accounting.
In 1972 as Forestry Operations Accountant for Wimco, Jayaraman acquired an indepth knowledge of forest terrains and realised a discrepancy between the accounting year for WIMCO (Jan. to Dec) and the forestry season (Sep. to March). This made it difficult to estimate cost for wood sent to the factories. This prompted him to institute a system called Likely Ultimate Cost to achieve a balanced figure through the year without overloading a cost figure at the end. It necessitated estimating cost constantly a year ahead.
In the course of his duty, as per the case study detailed in the book, Jayaraman was called upon to play whistle-blower to corrupt practices. He says “An Accountant is the trustee of the public wherever he/she is employed. The personal case study reported in this book is not to be construed as whistle-blowing but performing one's duty. An Accountant undertakes social responsibility quietly fighting for justice where 'matsyanyaya' is prevalent. Matsya means fish and nyaya justice, where the big fish swallows the small one.” Jayaraman went through subsequent inquiries at great personal cost to be vindicated in his stand against corruption. His joining the Wellcome Foundation later remains possibly the only HR case study where the whistle-blower was appointed to a company despite a written negative reference from the previous employer specifically imploring the new employer not to appoint.
It was in 2001, called upon to prepare a normal ROI for an investment in a major ERP package that Jayaraman drafted a unique methodology – RoI based on the intangible, covering the entire spectrum of usage of an ERP package and its capability rather than submitting to the futility of its usage hovering around 8%, for almost all highly priced ERPs, based on cash-flow. Inactivity Based Cost Management was born (and copyrighted) in 2006.
XIV Conclusion
 |
| The three criteria set for Governance |
To quote from the book: as a mission statement: “ ..that Code of conduct for public officials is made feasible, with an operational qualified workforce of half-a-million under the aegis of
proposed International Ethical Standards Board, to have an impact on the anti-corruption drive worldwide, a challenge all Member States should endorse.” So should you. Make it happen creating this force.
As quoted in the book: “The accomplice to the crime of corruption is frequently our own indifference - Bess Myerson”
You may use this blog to comment on the Preview and please see the one that has appeared already.
XV The Book
This is the Preview of the book Titled Inactivity Based Cost Management: Published as an eBook through Amazon Kindle. Book is available from Amazon UK as well Amazon US.
The book is approx 270 pages by print standards and 4 mb by Amazon Kindle.
There are about 40 charts and illustrations to elucidate IBCM principles.
Jayaraman Rajah Iyer
Kodaikanal
September 07, 2010
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